Income Tax Assessment Act 1997
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Hide history noteSECTION 713-725 Treatment of certain assets and liabilities of general insurance companies 713-725(1)
This section applies if a *general insurance company becomes or ceases to be a *subsidiary member of a *consolidated group.
713-725(2)
If the *general insurance company becomes a *subsidiary member of the group: (a) in working out the step 2 amount for the purposes of the table in section 705-60 , reduce that amount by the sum of the amount of each thing mentioned in subsection (4) ; and (b) in working out the *tax cost setting amount of a thing mentioned in subsection (4) for the purposes of section 705-35 , treat the *market value of the thing as zero.
713-725(3)
If the *general insurance company ceases to be a *subsidiary member of the group: (a) in working out the step 4 amount for the purposes of the table in section 711-20 , reduce that amount by the sum of the amount of each thing mentioned in subsection (4); and (b) for the purposes of section 711-25 , treat the *terminating value of a thing mentioned in subsection (4) as zero.
713-725(4)
The things are the *general insurance company ' s: (a) *assets for insurance acquisition cash flows to the extent that they are used to measure the company ' s adjusted *liability for remaining coverage; and (b) deferred reinsurance expenses to the extent that they are used to measure the company ' s adjusted liability for remaining coverage; and (c) recoveries receivable, or potential recoveries, measured under the *applicable insurance contracts standard to the extent that they relate to insurance contracts or reinsurance contracts; and (d) claims handling costs that are neither attached to, nor directly attributable to, a particular claim, to the extent that these costs are used to measure the company ' s adjusted *liability for incurred claims; and (e) loss components and loss-recovery components of onerous contracts to the extent that they are used to measure the company ' s adjusted liability for remaining coverage.
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